Help with commission charge backs

I'm hoping that you can help me. I have a client who's company is presently integrating a money back guarantee for their services. If certain agreed upon goals are not hit, the client gets their money back. What the CEO is saying that he presently wants to take commissions back if we had to refund a client. the sales reps have nothing to do with the deliverable and will full commission if their team does not attain what they promise. The CEO realizes it is unfair, but can't think of away to keep reps protected and not have the work cost the company substantial money. Have any of you dealt with this?

Can you offer a fair solution to sales people working with this kind of guarantee?

Or could you recommend certain resources to me?

Thanks so much for your help on this. - by The Dynamic Business

Hi,

No company can pay commissions from a non-income (a sale canceled, for whatever reason).

Reps can expect commission on work they completed.

Both the sides make fair points.

Perhaps, reps can accept the genuineness of the issue at hand, and agree to what the CEO says. Or at least forgo part of the commission (say 50%), if both sides agree.

Or, the reps can agree on a lower commission structure (enough to provide for refunds), if the CEO agrees. In such a case, reps can get their full commissions even in case of refunds.

Why should reps agree to forgo full or part of the commission on refunds? Because they sell what the company offers. And the company's offer includes refund for service the company can't accomplish.

What is important is for both sides to see the genuineness of the claim of the other side and work out a win-win solution.